Indian manufacturers stoke anger by increasing Covid vaccine prices

Narendra Modi’s government has come under fire for a policy shift that will force states and private buyers to pay more for scarce vaccines as India is engulfed by a calamitous coronavirus wave.

India will expand its vaccination programme to anyone aged over 18 on Saturday but vaccine manufacturers have been given permission to raise prices significantly.

The country reported more than 354,000 new Covid-19 infections on Monday, another world record, along with 2,800 deaths. Experts believe the true toll is being vastly undercounted.

Cases have overwhelmed health services and sparked acute shortages of hospital beds and life-saving supplies, such as oxygen. New variants, including the B.1.617 strain discovered in India, are suspected of stoking the surge.

The scale of the disaster has prompted the US, UK and EU to provide emergency supplies including oxygen, ventilators and raw materials for vaccine production, while Modi’s government has been criticised for ordering the removal of social media posts critical of its handling of the crisis.

India is the world’s largest vaccine manufacturer. But, after limited uptake in the early weeks of its inoculation campaign, demand has surged and the country is facing shortages. The pace of vaccination has slowed from as many as 4m jabs a day this month to fewer than 3m.

From May 1, the government will continue to buy half of India’s monthly vaccine production of about 65m jabs to supply to the over-45s. But states and private entities have to procure shots for younger adults at higher prices set by the manufacturers, the Serum Institute of India and Bharat Biotech.

Experts warn that breaking with the centralised Covid-19 vaccine campaigns used elsewhere gives the companies too much power and risks setting off chaotic competition and exacerbating inequities as many citizens are unable to secure vaccines.

“In a pandemic vaccines are a public good . . . Public goods should be paid through pooled resources by the government. That’s what’s happening around the world,” said Chandrakant Lahariya, a public health policy expert in New Delhi.

“By giving a free hand to manufacturers to determine the price . . . it’s a situation which puts everybody at a disadvantage.”

The Serum Institute, which produces the Oxford/AstraZeneca vaccine, said state governments would pay Rs400 ($5.35) and private hospitals Rs600, compared with about Rs150 for the central government. Bharat Biotech, which makes an indigenous jab, will charge Rs600 for states and Rs1,200 for private buyers.

The Serum Institute defended its prices by arguing that the higher prices would help it scale up production, while Bharat Biotech said “recovering costs is essential in the journey of innovation”.

A person close to the vaccine manufacturers said: “If you don’t open up pricing, no other players are going to come to India”.

K Sujatha Rao, India’s former health secretary, said the policy would give the Serum Institute enormous influence over allocating scarce vaccines while reaping huge profits. It would also encourage them to sell mainly to the private sector.

“When the government of India is the sole buyer, it has tremendous market power and can definitely bargain and get a better price,” Rao said. “You are making states compete with the private sector on a differential pricing basis. The younger rich can go and buy vaccines from the private sector and the poor [lose] out.”

The latest policy breaks with India’s past successful immunisation campaigns — such as its polio eradication drive — where the central government was the sole buyer of vaccines, and distributed them to the states for administering to the population.

Pinarayi Vijayan, the chief minister of Kerala state, said states, whose finances have been buffeted by the pandemic, would struggle to pay the higher prices. “It is imperative that vaccines are provided to the states as public good, free of cost,” he wrote.

The new system of having multiple buyers vying for vaccines amid scarce supply “essentially becomes a free for all between the states, which is not a good thing”, said K Srinath Reddy, president of the Public Health Foundation of India. “It is not going to be equitable and it is not going to be efficient.”